Wednesday, July 18, 2012

Joseph Schumpeter the Political Economist

Joseph Schumpeter (1883-1950) was an economist from Austria who coined the famous term "creative destruction." Here is the PDF link to a paper I wrote on him in 1998 while teaching economics at Cleveland State University. Schumpeter was more like a political economist of old (e.g., Adam Smith) than like the über-mathematical economists of today. His broad style of social analysis that addresses cultural and social factors in addition to more purely economic factors is refreshing today when economics is so detached from reality that its predictions have rightfully become matters of mockery in the current economic crisis.

The paper compares Western nations and the nations of East Asia in relation to the theme of savings and economic growth. One thing I would certainly add to the paper is the reality that today the Japanese population is failing to reproduce. This observation relates to the paper's attempt to relate the activity of savings to a long-term horizon based on providing for one's children. Surprisingly, after 14 years, I still find the paper's observations on savings quite relevant today, especially in today's era of private and public debt crises.